Gold prices have traded in a tight $20 range all week

GOLD PRICE NEWS – The gold price, close this week at $1,539 per ounce. Gold prices have traded in a tight $20 range all week while volatility in global financial markets has risen. Since touching its record high of $1,577 per ounce in early May, the price of gold has been consolidating above $1,500 as investors weigh the short-term impact of the escalating sovereign debt crisis on the yellow metal.

Holly Hendershot, on the Global Precious Metals team at TD Securities, noted, “The precious metals markets seem a little confused with what a potential Greek default might mean for them – contagion fears and risk aversion may well drive investors back to the USD, though safe haven status should surely attract the gold bugs. It seems owning Gold against EUR/AUD/CAD might be the better play here.”

The euro, after sinking all week on fears of a Greek default, moved higher this morning after German Chancellor Angela Merkel assured markets that Germany was committed to European integration and to the euro. The U.S. Dollar index (DXY) fell 0.28 to 75.15 as the euro rose to 1.428 against the greenback.